Noble Energy Inc. (NYSE: NBL) today announced that the Aphrodite structure at its Block 12 concession in Cyprus's exclusive economic zone has a gross mean average of 7 trillion cubic feet (TCF) of natural gas. Results from drilling, formation logs and initial evaluation work indicate an estimated gross resource range of 5-8 TCF.
The find is smaller than both the Tamar and Leviathan offshore gas discoveries in Israel, in which both Noble Energy and Delek are partners with other companies. Tamar has 9 TCF, discovered in 2009, and Leviathan has 16 TCF, discovered in 2010.
Noble Energy chairman and CEO Charles Davidson said, "We are excited to announce the discovery of significant natural gas resources in Cyprus on Block 12. This is the fifth consecutive natural gas field discovery for Noble Energy and our partners in the greater Levant basin, with total gross mean resources for the five discoveries currently estimated to be over 33 TCF. This latest discovery in Cyprus further highlights the quality and significance of this world-class basin."
Noble Energy owns 70% of Block 12 and Yitzhak Tshuva-controlled Delek Group Ltd. (TASE: DLEKG) units Avner Oil and Gas LP (TASE: AVNR.L) and Delek Drilling LP (TASE: DEDR.L) each own 15%, after the Cypriot government allowed the companies to exercise their options to the concession on December 9.
Earlier, the Israel Securities Authority agreed to relax its ban on the oil exploration partnerships to invest outside Israel, and amended procedures to allow them to invest in exploration and production in Cypriot waters. The Israel Tax Authority also agreed to recognize exploration and production expenses for Block 12 as if they were made in Israel.
In November, Noble Energy said that Block 12 had an estimated 3-9 trillion cubic feet of natural gas, with a 60% chance of geological success.
Noble Energy obtained the Block 12 concession in October 2008. At the time, it was the only oil and gas company to ask to drill in Cypriot waters. The license was for three years and could be extended twice. Block 12's original concession area was 4,000 square kilometers (ten times the size of the average Israeli exploration license), but the company agreed to a 25% reduction at the time of the first extension.
Given Cyprus's small consumption of natural gas, almost all of Block 12's reservoir can be exported. The discovery, plus the Israeli discoveries should justify the plan by Cyprus and Delek to build a natural gas liquefaction plant in Cyprus at an investment of at least $10 billion.
Published by Globes [online], Israel business news - www.globes-online.com - on December 28, 2011
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